Ministers cannot grant tax concessions

A press release issued by the Ministry of Finance and Mass Media states that Minister of Finance Mangala Samaraweera assures caretakers of religious institutions and the public that…

…there was no truth in the canards propagated to mislead the public claiming members of families with an annual income of Rs. six Lakhs, senior citizens and religious institutions will be taxed under this new Act.

The previous regime granted long-term tax concessions and tax holidays in an undue and unjustifiable manner to henchmen and selected foreign nationals for lucrative commissions and has resulted in the distortion in economic benefits in the country. This situation has led to 10% of the population of the country enjoying 54% of the economic benefits, it further added.

However, the present Government, has introduced a transparent policy of tax concessions through the new Inland Revenue Act, where all parties including neglected local investors who could also enjoy tax concessions for investments, putting an end to the era of going after politicians and their henchmen with bribes for such concessions.

Since this Act clearly defines tax concessions available to any investor, any investor can recognize beforehand the tax concessions they will get, the release further added.

Minister Samaraweera alleged that MP Bandula Gunawardena was making distorted statements on the Inland Revenue Act by blindly following Kurunegala District MP, Mahinda Rajapaksa who was conspiring to disrupt the current regime. MP Bandula Gunawardena in a recent statement claimed the new Inland Revenue Act was favourable to foreigner investors and disadvantageous to Sri Lankan investors.

But he seems to have conveniently forgotten the various tax holidays and exemptions given by ministers of the previous regime to their cronies making use of provisions of the Strategic Development Act, the release added.
Mahinda Rajapakse and his group is against streamlining of tax holidays fearing that in the future no politician will have the upper hand to decide on tax holidays for investors. The previous regime made use of the Strategic investment Act to arrogate powers unto themselves and make money, it added.

With the introduction of this Act, the discretionary power vested in the Minister of Finance to grant tax concessions will also be negated.

Aiming at strengthening the economic freedom of the public, the Government will launch eight new concessionary loan schemes in September for diverse beneficiaries including entrepreneurs, small and medium scale industrialists, farmers and journalists through State and private sector banks introducing tax concessions and tax holidays in line with investments for every sector of the economy, it concluded.